Gillard's Australian Goverment rejects 'Investor privileges'

[Oscar]

Gillard's Australian Goverment rejects 'Investor privileges'
in Free Trade Agreements + Comments & References

------- Forwarded message follows -------
From: "Janet M Eaton" <jmeaton@ns.sympatico.ca>
To: GLOBALL
Date sent: Tue, 19 Apr 2011 13:10:40 -0300
Subject: Gillard's Australian Goverment rejects 'Investor privileges' in Free Trade Agreements + Comments & References

Send reply to: jmeaton@ns.sympatico.ca
Priority: normal

Dear All:

The following announcement that Julia Gillard's Australian government has rejected investor-State dispute settlement in trade agreements [1] is good news for those of us in the anti-corporate economic globalization movement and all who care about good government, democratic legislation and process, fairness, poverty reduction, the environment, and the planet not to mention a sustainable economy. For indeed the investor state mechanism in Free Trade Agreements [FTAs] has been widely discredited on many fronts.

[For more on Investor state sometimes referred to as investor privileges see:

http://www.policyalternatives.ca/sites/default/files/
uploads/publicati
ons/National_Office_Pubs/2008/NAFTA_Dispute_Table.pdf

This is not to suggest that we don't need a total global economic shift but this is an important step in rejecting one of the very undemocratic and decried aspect of current FTAs] .

There has been a very contentious debate in the US on this matter. Obama campaigned on reviewing NAFTA Ch 11 [investor state] and other
harmful aspects of Free Trade Agreements in general. Since then over 100 Congress persons and many progressive NGOs are supporting the TRADE [Trade Reform, Accountability, Development and Employment ] Act tabled by Representative Michael Michaud [D- Maine] and Sen. Sherrod Brown (D-Ohio) -
[For more see:
http://www.citizen.org/trade/tradeact/

Public Citizen, other progressive NGO's and many Democrats have been campaigning hard to encourage the Obama administration to reject the old guard form of free trade and investment agreement which has been widely denounced by all manner of academics, think tanks and NGO's. This progressive NGO lobby has been particularly focused in recent months on the TPP - Trans Pacific Partnership [see # 2 below for more on the TPP ] trying to convince Obama to reject the NAFTA Ch 11 investor-state dispute settlement mechanism. But he apparently has chosen to listen to his admin types like Larry Summers who favour the status quo instead of political advisors who remember his promises to voters.

It is therefore very encouraging to see that principles put forth in the recent Australian trade policy statement will also guide the Gillard Government's trade and investment strategy in the TPP negotiations.

For more background on Australia's approach to investor state, and on this recent decision see a very good article included below:
See [3]

http://donttradeourlivesaway.wordpress.com/2011/04/19/
australia-
rejects-investor-state-arbitration-provision-in-trade-agreements/

"Australia rejects Investor-State arbitration provision in trade agreements." The IA Reporter notes:
" the government appears to have taken seriously the economic findings of a public commission tasked with charting a future trade and investment policy....the Australian Productivity Commission could find no compelling economic rationale for the inclusion of investor-state arbitration mechanisms in its trade and investment agreements...The Commission concluded that there were few clear benefits, and several worrying risks, associated with such provisions."

Hopefully advocates for fairer trade in Canada and around the world will be able to point to Australia's example in their quest for rejection of the investor state clause in future trade and investment agreements and their demands for renegotiation and redesign of global trading arrangements.

all the best,
Janet M Eaton, PhD
Wolfville, Nova Scotia

See also:

Educational Power Point by Janet M Eaton,
NAFTA: Growing Resistance & Calls for Renegotiation & Oversight:
http://www.stopthehogs.com/pdf/nafta-resistance.pdf

Those of us in Canada must bear the shame of Stephen Harper´s right wing Conservative government which insists [with no resistance from the Liberals] that all countries with whom they negotiate bi-lateral FTA´s accept the Investor State mechanism.
Canada is now in the midst of negotiating a Comprehensive Economic
and Trade agreement [CETA] with the European Union which traditionally has not employed Investor State in its trade agreements. Under Canada´s insistence it is now on the table although there has been some resistance from Europe. Canada has recently signed several bi-lateral FTAs and is negotiating many more with investor-state as part of their approach to economic renewal through economic growth defined in part by a frenzy of bi-lateral FTA negotiations i.e the same old model of resource depletion, ecosystem degradation, and continued maintenance of a flawed global financial system that has brought us to the brink of collapse economically, financially, socially, and ecologically.


==============================================

[1] Subject: [Can-EU-CETA] Australian trade policy statement rejects
investor-State dispute settlement
Date sent: Tue, 19 Apr 2011 07:36:18 -0400
To: canada-eu-ceta@googlegroups.com
Send reply to: canada-eu-ceta@googlegroups.com

Bonjour,
Un ami d'ATTAC-Allemagne nous informe de ceci :
Below is the just released Australian trade policy statement, which rejects investor-State dispute settlement in trade agreements (see government link for the entire statement and the excerpt on investor-State dispute settlement below). The principles put forth in the statement will also guide the Gillard Government's trade and investment strategy in the TPP negotiations.

http://www.dfat.gov.au/publications/trade/
trading-our-way-to-more-
jobs-and-prosperity.html#investor-state

*"Investor-state dispute resolution
*
Some countries have sought to insert investor-state dispute resolution clauses into trade agreements. Typically these clauses empower businesses from one country to take international legal action against the government of another country for alleged breaches of the agreement, such as for policies that allegedly discriminate against those businesses and in favour of the country's domestic businesses.

The Gillard Government supports the principle of national treatment - that foreign and domestic businesses are treated equally under the law. However, the Government does not support provisions that would confer greater legal rights on foreign businesses than those available to domestic businesses. Nor will the Government support provisions that would constrain the ability of Australian governments to make laws on social, environmental and economic matters in circumstances where those laws do not discriminate between domestic and foreign businesses. The Government has not and will not accept provisions that limit its capacity to put health warnings or plain packaging requirements on tobacco products or its ability to continue the Pharmaceutical Be......

You received this message because you are subscribed to the Google
Groups "Canada-EU CETA" group.

------------------

[2] TPP
The Trans-Pacific Partnership, also known as the Trans-Pacific Strategic Economic Partnership Agreement or TPP agreement is a multilateral free trade agreement that aims to integrate the economies of the Asia-Pacific region. The original agreement between the countries of Brunei, Chile, New Zealand and Singapore was signed on June 3, 2005, and entered into force on May 28, 2006. Five additional countries, including Australia, Malaysia, Peru, United States, and Vietnam, are currently negotiating to join the group. On the last day of the APEC summit on November 14, 2010, leaders of the nine current negotiating countries endorsed the proposal advanced by President Obama that set a target for settlement of negotiations by the next APEC summit in 2011.[1]

--------------

[3] http://donttradeourlivesaway.wordpress.com/2011/04/19/
australia-
rejects-investor-state-arbitration-provision-in-trade-agreements/

Australia rejects Investor-State arbitration provision in trade agreements
Posted on April 19, 2011 by donttradeourlivesaway

Realizing the harmful impact of Investor to State dispute mechanism in FTAs on broad spectrum of public health and environmental protection and legislation policies, Australia had refused to accept Investor to State dispute mechanism in FTA with US.
It has now stated in a Trade Policy Statement released on Tuesday (April 12, 2011) that, "the Australian government notes that it had included ISA (Investor State Arbitration) provisions in some past agreements with developing countries at the behest of Australian business interests, but that it will not do so in future."

The Investor-State Provision is currently being negotiated within India-EU FTA and Trans Pacific Partnership Agreement (between Australia, New Zealand, Singapore, Brunei, Vietnam, Malaysia, Chile, Peru and the US). Will India and other developing countries follow the precedent set by Australia to protect their public health system?

In policy switch, Australia disavows need for investor-state arbitration provisions in trade and investment agreements
Apr 14, 2011
By Luke Eric Peterson | IA Reporter

The Government of Australia has announced that it will no longer pursue investor-state arbitration provisions in future international economic agreements with developing countries.

The policy shift builds upon Australia´s longer-standing concerns about including such provisions in agreements with higher-income developed economies. (In its Free Trade Agreement with the United States, Australia famously declined to be bound by an investor-state arbitration (ISA) mechanism - pointing instead to the reliability of its own legal system for resolving disputes involving U.S. investors).

In a Trade Policy Statement released on Tuesday (April 12, 2011), the
Australian government notes that it had included ISA provisions in some past agreements with developing countries at the behest of Australian business interests, but that it will not do so in future.

"If Australian businesses are concerned about sovereign risk in Australian trading partner countries, they will need to make their own assessments about whether they want to commit to investing in those countries," the Statement notes.
The government has signaled that it will continue to support the principle of National Treatment, so "that foreign and domestic businesses are treated equally under the law."

However, the government will not negotiate treaty protections "that would confer greater legal rights on foreign businesses than those available to domestic businesses" or that "constrain the ability of Australian governments to make laws on social, environmental and economic matters in circumstances where those laws do not discriminate between domestic and foreign businesses."

The Statement is remarkable for citing concerns that foreign investors might target particular public policies, including a prescription drug policy that has drawn the ire of global pharmaceutical companies and proposals for the plain packaging of tobacco products that have drawn criticism from foreign tobacco companies.

Indeed, calls by the Philip Morris tobacco company for an investor-state arbitration mechanism in a pending Trans-Pacific Trade Agreement between Australia, the U.S. and other countries, have led to a flurry of headlines in Australia in recent months, with reports suggesting that the company wishes to mount an international law-based challenge to Australian plans for the plain-packaging of tobacco products. (A similar arbitration claim launched by Philip Morris against the Republic of Uruguay pursuant to the Switzerland-Uruguay bilateral investment treaty has been discussed widely in Australian media and policy circles).

While Australia´s new policy shift on investor-state arbitration appears to have been motivated by defensive policy concerns, one observer tells IAReporter that the government appears to have taken seriously the economic findings of a public commission tasked with charting a future trade and investment policy.

Jonathan Bonnitcha, a doctoral candidate in law at Oxford University, and the co-author of one of several dozen submissions made to the Australian Productivity Commission last year, says that it is important to note that the Australian Productivity Commission could find no compelling economic rationale for the inclusion of investor-state arbitration mechanisms in its trade and investment agreements.
As reported by IAReporter last year, a draft report of that same Commission had generated a flurry of debate as to the merits and rationale of investor-state arbitration provisions, and lead to a final report wherein the Commission concluded that there were few clear benefits,
and several worrying risks, associated with such provisions.

On Bonnitcha´s view, the government´s new policy may be explained more by the Commission´s failure to find an economic justification for a core plank of Australia´s trade policy, as by concerns that Australia will be sued by foreign investors. He notes, however, that the Commission also weighed other considerations, including concerns about the quality of rule of law in developing countries.

Bonnitcha says that the Commission held that such concerns might be better addressed by capacity-building and financial support for domestic legal reform than by creating a system of international arbitration permitting foreigners to opt out of such legal systems altogether.

Effects on investors and arbitration industry to be watched closely
While the new developments will be welcomed by critics concerned with
the over-reach of investor-state arbitration, the policy shift may be
met with greater concern from some law firms and arbitrators engaged in investor-state arbitration work.

One Australian practitioner, Michael Polkinghorne of the law firm White & Case, tells IAReporter that investors may have the ability to work-around the absence of arbitration clauses in Australian agreements by free-riding on the treaties concluded by other countries.

"It certainly creates a concern for Australian investors seeking to invest abroad, although frequently these concerns can be addressed by
intelligent corporate structuring. The real problems may well be for those investors who never think about treaty rights in the first place."

Another observer from the Asia-Pacific region, New Zealand lawyer James Hosking, tells IAReporter that he will be watching for any ripple effect from Australia´s new policy.

"Other free trade agreements from the region - like the China-New Zealand FTA - have produced very nuanced investor-state dispute mechanism provisions," he says.

Hosking, a Partner with Chaffetz Lindsey LLP in New York City, adds that he hopes "the new Australian policy doesn´t lower the benchmark for other treaties being considered."

Australia´s Trade Policy Statement is available here
http://www.dfat.gov.au/publications/trade/
trading-our-way-to-more-
jobs-and-prosperity.html#investor-state